The U.S. subsidiary of HSBC Holdings plc is near a large settlement with the government over its role in the issuance of pre-crisis residential mortgage-backed securities.
HSBC North America Holdings Inc. and various subsidiaries have received various subpoenas and requests for information from the U.S. Department of Justice and the Massachusetts Attorney General since 2010.
What the federal government sought were documents and other information about the HSBC’s involvement as an issuer, sponsor, underwriter, depositor, trustee, custodian or servicer of RMBS.
According to a filing with the Securities and Exchange Commission, HSBC reached a settlement in principal with the Justice Department in July.
The agreement would cost HSBC $765 million and resolve claims tied to RMBS originations and securitizations from 2005 to 2007.
In addition, HSBC said it reached an agreement with Massachusetts.
“The settlement-in-principle with the DoJ and resolution with the Massachusetts Attorney General do not preclude litigation brought by other parties and HSBC may be subject to additional claims, litigation and governmental or regulatory scrutiny relating to its participation in the US mortgage securitisation market,” the SEC filing stated.
In 2016, HSBC settled with Virginia for $63 million to resolve MBS-related claims.
